Happy Bobby Bonilla Day! If you don’t know who that is, allow us to introduce you to your new professional and financial role model.
Bobby Bonilla is a retired MLB player who last took the field in 2001, but, 20 years later, is still getting paid $1.2 million a year by the New York Mets. In fact, he’ll get paid $1,193,248.20 a year every year until 2035, when Bonilla is 72 entire years old.
At that point, the final sum will be $29.8 million paid for a sport Bonilla will not have played professionally for 34 years.
The payout of the most clutch retirement plan in history happens every year on July 1, a day when the baseball world stops to chuckle at what is either one of the worst or best sports contracts in history, depending on whether or not you’re Bobby Bonilla.
How exactly did such a deal go down? Well, it involves Bernie Madoff, of all people. In 1999, the New York Mets wanted to get rid of Bonilla, but still owed him almost $6 million on his contract. Instead of paying him outright, Bonilla’s agent Dennis Gilbert negotiated with the team to defer payments until 2011, with an 8% annual interest rate. When you calculate it all out, you get that nice, generous $29.8 million sum.
That seems like kind of a terrible deal for a team to pay almost five times the original amount of the contract, but here’s the thing. One of the owners of the Mets, Fred Wilpons, was involved in Bernie Madoff’s Ponzi scheme and believed he was getting huge returms from his investments that would far outweigh the eventual deferred cost of Bonilla’s contract. Obviously, we all know how the Madoff scheme turned out, so unfortunately for the Mets, they never saw that return.
Bobby Bonilla, however, will see another $1.2 million in his account today. Cheers.